Colorado Employer's Law Blog - This is a tagline

Effective January 1, 2012, Colorado's minimum wage increased by $0.28, from $7.36 per hour to $7.64 per hour (for tipped employees, from $4.34 to $4.62).  This is $0.39 more than the federal minimum wage of $7.25 per hour.  

The new minimum wage requirement is set forth in Colorado Minimum Wage Order 28 (PDF) now in effect. Because employers in Colorado must comply with both federal (Fair Labor Standards Act) and state (Colorado Wage Act) laws, the higher prevailing wage must be paid to employees.

This $0.28 increase represents the 3.8% increase to the Denver-Boulder-Greeley Consumer Price Index (CPI) from 2010 to 2011. Colorado is one of eight states with a minimum wage tied to inflation. The other states include Arizona, Florida, Montana, Ohio, Oregon, Vermont, and Washington. Colorado's inflationary adjustment requirement was passed by a relatively close vote on Amendment 42 to the Colorado Constitution in 2006 (823,526 in favor; 721,530 against).

According to the Bell Policy Center in Denver, and as reported by the Denver Post, this year's minimum wage increase will affect 74,000 workers in Colorado, or 3.4% of Colorado's workforce.  

More information about the 2012 Colorado minimum wage increase can be found on the Colorado Department of Labor website.

Promoting public health? Sounds good. Making sure working adults stay at home when they are sick? I'm on board. Flexible and supportive working environment? Of course, who doesn't want that.

Voters in San Francisco, Washington D.C., Milwaukee, and Connecticut were motivated by these ideals when passing paid sick leave ordinances or bills in their cities or state (although Wisconsin Governor Scott Walker nullified Milwaukee's bill after it was passed). You can bet voters in Denver, too, will be equally motivated by these ideals and the desire to help working families and low income wage earners when deciding Ballot Initiative 300 in November 2011. 

But, what exactly is the proposed Denver Paid Sick and Safe Time Ordinance (PDF), and is it really a good idea for Denver?   

Key Provisions of Denver's Proposed Paid Sick and Safe Time Ordinance

• Provides paid sick and safe time leave for all employees within the geographic boundaries of the City and County of Denver, including part-time and temporary employees, who work at least 40 hours a year (federal and state government employees and union members are exempt).
• All Colorado employers who employ eligible workers in the City and County of Denver must comply, regardless of size, but new businesses are exempt during their first year of operation.
• Paid leave would accrue at the rate of 1 hour for every 30 hours worked.  
• Large employers, defined as employers with 10 or more employees, must offer up to 72 hours, or 9 days, of paid leave each calendar year.  
• Small employers, defined as those with less than 10 employees, must offer up to 40 hours, or 5 days, of paid leave each calendar year.  
• Up to 72 hours, or 9 days, of paid leave may be carried over from year to year.
• Paid leave may be taken after 90 days of employment, and may be taken in as few as 1 hour increments.  
• No advance notice is required for an employee to take leave.
• No documentation is required until the employee takes 3 or more consecutive days off.
• Employers cannot require employees to search for, or provide, a replacement worker to cover the hours missed.
• Employers cannot "take retaliatory personnel action or discriminate" against employees exercising their sick and safe time rights.
• Paid leave can be taken for:  
  • An employee's own mental or physical illness, injury, health condition, need for medical care or treatment, or need for a medical procedure or preventative medical care;
  • To care for an employee's family member's mental or physical illness, injury, health condition, need for medical care or treatment, or who needs a medical procedure or preventative medical care;
  • The closure of the employee's place of business, or to care for a child whose school or place of care has been closed, due to a public health emergency;
  • To seek a civil protection order to prevent domestic abuse pursuant to Section 13-14-102, C.R.S.;
  • To obtain medical care or mental health counseling, or both, for the employee or employee's children to address physical or psychological injuries from domestic abuse, stalking, sexual assault, or other crime involving domestic violence;
  • To make the employee's home secure, or to seek new housing, due to domestic abuse, stalking, sexual assault, or other crime involving domestic violence; and
  • To seek legal assistance to address issues arising from domestic abuse, stalking, sexual assault, or other crime involving domestic violence, and attend or prepare for court-related proceedings.

Unclear and Potentially Troublesome Provisions

1.  Definition of "Family Member" Too Broad

Although seemingly modeled after the San Francisco and D.C. bills, Denver's new paid leave ordinance includes a far broader definition of "family member" than any prior bill passed. It includes:  

* A person related by blood, marriage or legal adoption, including a child, parent, spouse, sibling, grandparent, or grandchild of the employee;

* A foster child, parent, sibling, grandparent, or grandchild of the employee;

* A child to whom the employee stands in loco parentis or for whom the employee is the legal guardian;

* The employee's domestic partner;

* The spouse of an employee's child, parent, sibling, or grandparent;

* A legal guardian of the employee or a person who stood in loco parentis to the employee when he or she was a minor;

* A parent of the employee's spouse; or

* Any other individual related by blood or affinity whose close relationship is equivalent to a family relationship.

The spouse of an employee's sibling? Call me crazy, but I think it is a real problem to obligate a small business owner to provide paid time off for an employee to take his or her sister's husband to a routine doctor's appointment. Or, to leave open all the possible individuals covered under the vague phrase "any other individual related by blood or affinity whose close relationship is equivalent to a family relationship." I wonder when we would see the first complaint involving a worker claiming that his or her college roommate is "like family."

2.  Unclear How to Count Number of Employees or Who May Be Eligible

It is unclear how employers will be required to count their number of employees to determine the amount of leave benefits that must be offered.  The definition of employer includes all businesses in the State of Colorado.  But, the definition of an eligible employee is anyone employed within the geographic boundaries of the City and County of Denver.  So, for purposes of determining the amount of leave benefits, are employers required to count all employees in Colorado, or only those employed within the City and County of Denver?  

Likewise, if employees need only be employed in the City of County of Denver for 40 hours a year to be eligible, is a worker whose main office is located elsewhere in Colorado, but who travels to Denver frequently throughout the year for deliveries or to conduct business, eligible for the mandated leave benefits? 

3.  No Advance Notice Required

Where other paid sick leave bills expressly authorize employers to require reasonable notice to be given where practicable when an employee's need for leave arises, Denver's new proposed ordinance vaguely says that employers "may not impose unreasonable barriers to use of paid sick and safe time."  What does that mean?  An "unreasonable barrier" in one instance could be reasonable under different circumstances. The use of such vague language, rather than clear language allowing employers to require advance notice where practicable, in my view, tips the scale of this legislation away from fair and balanced.   

4.  Employers Prohibited From Requesting Documentation

Additionally, where other sick leave bills allow employers to require appropriate documentation to support the leave to prevent abuse, Denver's proposed ordinance prohibits employers from requesting any documentation, until after 3 consecutive days of absence.

5.  Employers Already Offering Generous Leave Benefits Not Necessarily Exempt

Finally, even though the new ordinance attempts to exempt employers who already provide vacation or personal time off (PTO) in an amount equivalent or greater than the mandated 9 (or 5) days of leave benefits, the rub is that employers must allow the vacation or PTO "under the same conditions as paid sick and safe time" - meaning that if the other leave benefits require prior notice and/or documentation, this new leave bank must be provided in addition.  This is another major difference between Denver's proposed sick leave ordinance than those passed in San Francisco, D.C. and Connecticut. At least in those ordinances or bills, employers who offered more leave days than that legislatively mandated, were deemed in compliance, without all the other restrictions.  

Food for Thought

The Agency for Human Rights and Community Relations (staffed currently by 10 people) in Denver would be responsible for implementing and administering this new law, taking complaints, conducting investigations, holding hearings, providing conciliation, issuing orders, and imposing fines. With only 10 individuals currently in the Agency, the implementation of this new ordinance along with a potential influx of complaints may likely require expansion, using already-tight taxpayer dollars.

Everyone knows that successful, long-term and mutually beneficial employment relationships require employees and employers to work together, and there are a multitude of good employers in Denver and throughout Colorado who strive to keep their workforce happy with generous benefit packages. I am certainly not advocating that employees come to work sick or face losing their job if their child is sent home from school sick.  But, is imposing overly broad, vague legislation with unusually restrictive obligations on large and small employers alike, however good in principal, what Denver needs in this economic climate? Governor John Hickenlooper and Mayor Michael Hancock say no, and it is now up to Denver voters to decide in November. 

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UPDATE:  Since first publishing this blog post, Seattle passed its version of paid sick leave legislation in September 2011.  Seattle's 50-page ordinance was approved by the City Council on September 12, 2011 and signed into law by the Mayor on September 23, 2011.  Although I have not done a complete side-by-side comparison with Denver's proposed ordinance, one primary difference is that Seattle's ordinance provides that employees must work at least 240 hours per year in Seattle to be eligible, while Denver's proposed ordinance provides leave benefits for eligible employees who work only 40 hours each calendar year. 

On May 31, 2011, in a decision critical to non-compete law in Colorado, the Colorado Supreme Court issued its holding in Lucht's Concrete Pumping Inc. v. Horner (PDF).  I previously blogged about the fluctuating state of Colorado's non-compete law given the decisions below in the Lucht's case -- Colorado Non-Compete Law in Flux (October 7, 2010).  For many who have been watching and waiting, The Decision (my sport's reference for the day...go Heat) has arrived, and it's favorable for employers.

Decisions Below

• The trial court granted summary judgment in favor of the employee (Horner) concluding that his noncompetition agreement was unenforceable due to lack of consideration, as he was not offered any additional monetary payment, raise, benefits, etc. in exchange for the non-compete covenant that his employer (Lucht's) wanted him to sign after he was hired. 
• The employer (Lucht's) appealed.
• The court of appeals agreed with the trial court and concluded that continued employment of an at-will employee cannot, by itself, constitute consideration for a non-competition covenant if the employee had already begun working.

• The employer (Lucht's) appealed again.

Colorado Supreme Court Reverses

In an en banc decision, the Colorado Supreme Court reversed the court of appeals:

"We hold that an employer that forbears from terminating an existing at-will employee forbears from exercising a legal right, and that therefore such forbearance constitutes adequate consideration for a noncompetition agreement.  We have recognized that continuation of at-will employment is adequate consideration in the context of an employee's receipt of a benefit, Continental Air Lines [v. Keenan], 731 P.2d [708,] 711 [(Colo. 1987)], and now apply that reasoning to the context of consideration for a noncompetition agreement."

The Court reasoned that because employment in Colorado is at-will, meaning that an employer may terminate an at-will employee at any time during the employment relationship as a matter of right, the forbearance from terminating an employee presented with a non-compete agreement after hire is sufficient consideration for such an agreement.  The Court further reiterated that there appears to be no question that sufficient consideration for a non-compete agreement exists when entered into at the commencement of at-will employment. 

So, there you have it.  The Colorado Supreme Court says continued at-will employment is sufficient consideration for non-compete covenants.  Employers may rejoice - there is no need to go back and offer more money or benefits to employees who have signed noncompetition agreements after hire. 

See related entry: Colorado Non-Compete Law in Flux - October 7, 2010

On May 9, 2011, the U.S. Department of Labor issued a news release announcing the launch of its first application for smartphones - a timesheet to help employees independently track the hours they work and determine the wages they are owed.  The App, called "DOL - Timesheet," is available to download for free on iTunes. 

Since the DOL's announcement, blogs and tweets have been flying about this new tool developed by the DOL Wage & Hour Division (WHD) as part of its ongoing efforts to "achieve compliance with labor standards to protect and enhance the welfare of the Nation's workforce."  In other words, the DOL WHD has been cracking down on employers who are not in compliance with the Fair Labor Standards Act (FLSA) with respect to the proper payment of wages (minimum wage, overtime), classification of employees (exempt vs. non-exempt), and recordkeeping, and many are viewing this new iPhone App as just another tool in the DOL WHD's arsenal in the war against employers (the App contains a link to the DOL WHD and information on how to make a complaint). 

Amidst the naysaying, there just may be some potentially positive aspects of the new App for employers (who, by law, are responsible for maintaining accurate and complete time and pay records):

1. Employees Now Have More Electronic Discovery Obligations.  Employees who install and use the "DOL - Timesheet" App now have their own electronic data and information that they must maintain and preserve in the event a claim arises.  Most cases involving the preservation (or improper destruction) of electronic data involve employers getting sanctioned for failing to put proper litigation holds in place and/or destroying relevant information.  But now, with employee-maintained programs and Apps, the balance of the electronic discovery playing field may be becoming a little more even.  Where employees fail to preserve and not destroy any relevant electronic time and wage records in their possession, employers may be in a position to move for sanctions up to dismissal of a claim depending on the circumstances and level of spoliation.  One can also only hope that with the new electronic tools available to employees, courts will begin to crack down on Plaintiff's lawyers for not properly counseling their clients on "litigation holds" to ensure that the individuals preserve relevant electronic information, including personal emails, text messages, Facebook information, and now, iPhone data. 
2. We May See Less 'Cocktail Hour' Stories About Hours Worked.  Documented time records are far better than relying on an employee's memory or guesswork at the amount of work actually performed.  Everyone knows that guy at the cocktail party who says he "works like a dog...80 hours a week!" is exaggerating a bit.  Still, when the DOL WHD investigates wage and hour complaints, and there is a lack of complete records for whatever reason (e.g., the employee is claiming off-the-clock work or it's a case involving misclassification of an exempt employee), they rely on these very types of 'cocktail hour' statements by employees, which generally operate to provide windfalls to employees.  Now, where employees may be tracking hours and wages on their iPhones, here's hoping that employers will be dealing with fewer verbal statements describing an actual 48-hour week as an 80-hour one. 

It remains to be seen how much use this new DOL - Timesheet App will get and how it may play into wage and hour claims and/or lawsuits.  But, it will be interesting to follow and see if employers can make lemonade out of lemons by effectively utilizing this new tool as an additional discovery device to possibly find and use key information that could make or break a case. 

Opening day for the Colorado Rockies at Coors Field is Friday, April 1, 2011.  It is a day of excitement, anticipation, feigned illnesses, and sell out crowds. Not only does baseball season start on a Friday this year (it has been Mondays since 1905), but it also falls on April Fools Day. Given these oddities, I can't help but wonder if there is the slightest chance that the U.S. Supreme Court may say "April Fools!" when it comes to the first two major employment law decisions of 2011. Rather than create bright line tests, these cases seem to create more confusion than clarity - and most certainly, feel like the Court is throwing employers some major curve balls.

Court Finds Third Party Title VII Retaliation Claims Are Viable

In Thomspon v. North American Stainless, L.P. (PDF), Eric Thompson and his fiance, Miriam Regalado, both worked for North American Stainless.  Ms. Regalado filed a charge of sex discrimination against the company with the Equal Employment Opportunity Commission.  Mr. Thompson was fired three weeks later. Mr. Thompson claimed he was fired because of his fiance's complaint.  North American Stainless said his termination was based on performance problems.  The district court granted summary judgment in favor of North American Stainless, finding that third party retaliation claims were not permitted by Title VII.  On appeal, the 6th Circuit Court of Appeals affirmed.  Certiorari was granted and oral argument took place on December 7, 2010.  On January 24, 2011, the U.S. Supreme Court, in a unanimous decision, held:

Title VII's antiretaliation provision must be construed to cover a broad range of employer conduct. Burlington N. & S. F. R. Co. v. White, 548 U. S. 53 (2006). It prohibits any employer action that well might have dissuaded a reasonable worker from making or supporting a discrimination charge.  We think it obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fiance would be fired.

The Court went on to state:

We must also decline to identify a fixed class of relationships for which third-party reprisals are unlawful. We expect that firing a close family member will almost always meet the Burlington standard, and inflicting a milder reprisal on a mere acquaintance will almost never do so, but beyond that we are reluctant to generalize.  As we explained in Burlington, 548 U.S. at 69, "the significance of any given act of retaliation will often depend upon the particular circumstances."  Given the broad statutory text and the variety of workplace contexts in which retaliation may occur, Title VII's antiretaliation provision is simply not reducible to a comprehensive set of clear rules.

Not only do retaliation claims generally pose the greatest risk to employers because of their amorphous nature, but now, companies are facing a brand new type of retaliation - one that arises from an employee who has a mere relationship with another employee who engaged in protected activity.  Prior to this case, the anti-retaliaton provisions of Title VII were simply held not to apply to third parties.  Now, the U.S. Supreme Court says that third party retaliation claims are viable, but provides little guidance as to the class of individuals that fall under protection.  As a result, expect more litigation on this issue to define just how far the anti-retaliation provisions may stretch.

'Cat's Paw' Liability in Discrimination Cases Turns on Proximate Cause

There were high hopes that the Court's decision in Staub v. Proctor Hospital (PDF) would resolve the split in circuits regarding the 'cat's paw' theory of liability in employment discrimination cases.  I wrote about 'cat's paw' liability generally, the oral argument that took place on November 2, 2010, and the various tests that have been applied by the circuit courts for the American Bar Association Labor and Employment Flash.  Although Staub involves the Uniformed Services Employment and Reemployment Rights Act (USERRA), its language is "very similar to Title VII," in that employers are prohibited from engaging in certain actions if the employee's protected status is a "motivating factor in the employer's action."  As such, this case has ramifications far beyond military service discrimination.  

On March 1, 2011, in an 8-0 decision written by Justice Scalia, the Court seemingly rejects the prior tests applied by the various circuit courts and instead, adopts a new formula for 'cat's paw' liability based on the tort theory of proximate cause.  The Court held:

"if a supervisor performs an act motivated by antimilitary animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA."

As Jon Hyman points out in his blog, this case hinges on a new test involving fact-based inquiries regarding "intent" and "proximate cause," which nearly guarantees that any case involving 'cat's paw' liability will be difficult, if not impossible, to be resolved on summary judgment and will go to trial - an expensive proposition for employers.  My sense is that, had this case involved any other form of discrimination other than related to military service, we may have seen an entirely different result.